LRB-2170/2
MED:cjs
2015 - 2016 LEGISLATURE
May 21, 2015 - Introduced by Senators LeMahieu, Nass, Gudex, Lasee, Roth,
Stroebel, Tiffany and Vukmir, cosponsored by Representatives Neylon,
Czaja, Craig, Jarchow, Quinn, Edming and Brandtjen. Referred to Joint
Committee for Review of Administrative Rules.
SB168,2,3 1An Act to repeal 227.137 (6) and (7), 227.17 (3) (em), 227.19 (3) (h), 227.19 (3m),
2227.24 (3m) (title) and 227.26 (2) (b) (title); to renumber 227.10 (2), 227.11 (2)
3(e) and 227.14 (2g) (a) and (b); to renumber and amend 16.28 (1), 227.14 (2g)
4(intro.), 227.16 (6), 227.185, 227.24 (2) (a), 227.24 (3m) and 227.26 (2) (b); to
5amend
13.56 (3), 73.16 (2) (b), 227.11 (title), 227.114 (6), 227.12 (4), 227.13,
6227.135 (1) (intro.), 227.135 (2), 227.137 (3) (intro.), (a) and (b), 227.137 (4),
7227.14 (2g) (title), 227.14 (2m), 227.14 (4m), 227.15 (1), 227.15 (1m) (intro.),
8227.15 (1m) (bm), 227.15 (1m) (c), 227.15 (4), 227.16 (1), 227.16 (2) (d), 227.17
9(1) (intro.), 227.17 (3) (f), 227.185 (title), 227.19 (2), 227.19 (3) (intro.), 227.19
10(3) (c), 227.19 (3) (e) (intro.), 227.19 (5) (b) 1. (intro.), 227.22 (2) (e), 227.24 (1)
11(a), 227.24 (1) (e) 1d., 227.24 (1) (e) 1g., 227.24 (2) (am), 227.24 (3), 227.24 (4)
12and 227.26 (2) (k); and to create 16.28 (1) (b) to (e), 20.505 (1) (ks), 35.93 (2) (b)
133. bm., 35.93 (2) (b) 3. gr., 73.17, 227.10 (1m) (b), 227.136, 227.137 (3m), 227.137
14(4m), 227.139, 227.14 (2) (a) 3m., 227.14 (2g) (c), 227.17 (3) (eg), 227.185 (2),

1227.19 (5) (b) 3., 227.24 (1m) (intro.) and 227.24 (2) (a) 2. of the statutes;
2relating to: various changes regarding administrative rules and rule-making
3procedures; time limits for emergency rules; and making an appropriation.
Analysis by the Legislative Reference Bureau
Current law
Permanent rules
Current law sets forth the procedure for promulgating administrative rules.
Generally, that procedure consists of the following steps:
1. The agency planning to promulgate the rule prepares a statement of the
scope of the proposed rule (scope statement), which must be approved by the
governor and the agency head before any state employee or official may perform any
activity in connection with the drafting of the proposed rule.
2. The agency drafts the proposed rule, together with an economic impact
analysis, plain-language analysis, and fiscal estimate for the proposed rule, and
submits those materials to the Legislative Council Staff for review. The agency must
also submit a proposed rule that may have an economic impact on small businesses
to the Small Business Regulatory Review Board (SBRRB), which must determine
whether the proposed rule will have a significant economic impact on a substantial
number of small businesses and may make certain other recommendations.
3. Subject to certain exceptions, the agency holds a public hearing on the
proposed rule.
4. The final draft of the proposed rule is submitted to the governor for approval
who, in his or her discretion, may approve or reject the proposed rule.
5. The final draft of the proposed rule, together with the economic impact
analysis, plain-language analysis, and fiscal estimate for the proposed rule, are
submitted to the legislature for review by one standing committee in each house and
by the Joint Committee for Review of Administrative Rules (JCRAR).
6. The proposed rule is filed with the Legislative Reference Bureau (LRB) for
publication in the Wisconsin Administrative Register (register), and, subject to
certain exceptions, the rule becomes effective on the first day of the first month
beginning after publication.
Emergency rules
Under current law, an agency may promulgate a rule as an emergency rule
without complying with the notice, hearing, and publication requirements for
permanent rules if preservation of the public peace, health, safety, or welfare
necessitates putting the rule into effect prior to the time it would take effect if the
agency complied with the requirements for permanent rules. An agency must
prepare, and obtain approval of, scope statements for emergency rules in the same
manner as for permanent rules and must obtain final approval of emergency rules
by the governor. In addition, an agency must submit a copy of an emergency rule it
promulgates to the SBRRB, which must determine whether it will have a significant

economic impact on a substantial number of small businesses and make certain
other recommendations.
An emergency rule may only remain in effect for 150 days, except that, at the
request of an agency, JCRAR may extend the effective period for an emergency rule
for one or more periods of up to 60 days each, not to exceed a total of 120 additional
days beyond the 150-day period.
The bill
The bill makes various changes regarding the rule-making procedures
established under current law. Significant changes regarding those procedures are
described below.
Role of Office of Business Development and Small Business Regulatory
Review Board; impacts on small businesses
The bill requires scope statements for proposed rules, and proposed rules in
final draft form, to be submitted to OBD instead of to the governor. Following either
submission, the bill requires the OBD to make a determination as to the agency's
authority to promulgate the proposed rule and report its determination to the
governor, who may then approve or reject the statement of scope or proposed rule as
under current law.
The bill also requires proposed rules that under current law must be submitted
to the SBRRB to instead be submitted to the OBD. Following the submission, the
OBD must make a determination as to whether the proposed rule may have an
economic impact on small businesses, and if the OBD so determines, the OBD must
submit the proposed rule to the SBRRB for an assessment of the extent of the
economic impact.
The bill makes changes regarding the duties of the SBRRB, including requiring
the SBRRB to determine whether a proposed rule will have any economic impact on
small businesses. The bill requires any determination, notice, or report that the
SBRRB is required to submit to an agency to be submitted within 45 days after
receipt of the proposed rule from the OBD, except that the bill allows the SBRRB and
the agency to extend that time by mutual agreement. The bill also makes other
changes regarding the requirements for agencies to complete initial and final
regulatory flexibility analyses for proposed rules.
Scope statements; preliminary public hearing and comment period on scope
statements
Current law prohibits an agency head from approving a scope statement until
at least ten days after publication of the scope statement in the register. The bill
eliminates that prohibition.
The bill requires an agency, following approval of a scope statement by the
governor, to submit to the LRB a notice of a preliminary public hearing and comment
period to allow for public comment and feedback on the scope statement. The agency
must hold the preliminary public hearing no sooner than the third day after
publication of the notice in the register. The preliminary public hearing and
comment period under the bill is in addition to the public hearing required under
current law for certain rules.

Passage of bill required for certain rules
The bill provides that if an economic impact analysis, a revised economic impact
analysis, or an independent economic impact analysis for a proposed rule indicates
that $10 million or more in implementation and compliance costs are reasonably
expected to be incurred by or passed along to businesses, local governmental units,
and individuals over any two-year period as a result of the proposed rule, the agency
proposing the rule must stop work on the proposed rule and do one of the following:
1. Submit a request for JCRAR to introduce a bill authorizing promulgation of
the proposed rule, which JCRAR may introduce in its discretion. The agency may
resume the rule-making procedure for the proposed rule upon enactment of such a
bill.
2. Modify the proposed rule to address the implementation and compliance
costs of the proposed rule. If a revised economic impact analysis, as approved by the
secretary of revenue, prepared following the modification indicates that $10 million
or more in implementation and compliance costs are not reasonably expected to be
incurred by or passed along to businesses, local governmental units, and individuals
over a two-year period as a result of the proposed rule, the agency may then resume
the rule-making procedure for the proposed rule.
3. Withdraw the proposed rule.
Independent economic impact analyses; duties of secretary of revenue
The bill allows the secretary of revenue, or his or her designee (secretary), or
a cochairperson of JCRAR, after an agency submits a copy of an economic impact
analysis for a proposed rule to the legislature, but before the proposed rule is
submitted to the OBD for final approval, to request that an independent economic
impact analysis be prepared for the proposed rule. If the secretary requests an
independent economic impact analysis, the request must be submitted to the
Department of Administration (DOA), which must then contract for the preparation
of the independent economic impact analysis. If a cochairperson of JCRAR requests
an independent economic impact analysis, the cochairperson must contract for the
preparation of the independent economic impact analysis. The person preparing the
independent economic impact analysis must complete the independent economic
impact analysis within 60 days after contracting with DOA or the cochairperson and
must include most of the same information and analysis that is required for an
economic impact analysis prepared by an agency. If an independent economic impact
analysis is requested for a proposed rule, an agency may not submit the proposed rule
to the OBD for final approval until the agency receives the completed independent
economic impact analysis.
Upon completion of an independent economic impact analysis, the person
preparing the analysis may submit a request to DOA or JCRAR, whichever is
applicable, for reimbursement of its actual and necessary costs of completing the
analysis. DOA must assess the agency that is promulgating the proposed rule, in the
case of a request by the secretary, for the costs of the independent economic impact
analysis. In the case of a request by a cochairperson of JCRAR, the legislature must
pay the costs of the independent economic impact analysis.

In addition, the bill allows JCRAR, when a proposed rule is before JCRAR for
final review, to request an independent economic impact analysis for the proposed
rule. If JCRAR requests an independent economic impact analysis at that time, the
analysis must similarly be completed within 60 days after JCRAR contracts for the
analysis, and JCRAR's review period is extended to the 10th working day following
receipt by JCRAR of the completed analysis.
The bill also requires the secretary to do all of the following:
1. Review and approve each initial economic impact analysis prepared by an
agency, including by reviewing the economic data and analyses used by the agency
in preparing the analysis. If the secretary determines that the agency's analysis does
not accurately gauge the economic impact of a proposed rule, the secretary must
recommend any modifications to the economic impact analysis that the secretary
considers necessary and direct the agency to prepare a revised economic impact
analysis for the proposed rule. An agency may not submit a proposed rule to the OBD
for final approval unless the secretary has approved the agency's initial or revised
economic impact analysis. The secretary may approve an economic impact analysis
only upon determining that the economic impact analysis accurately gauges the
economic impact of the proposed rule.
2. Provide training to agencies on appropriate data collection and methods of
analysis for purposes of preparing economic impact analyses of proposed rules.
3. Attend JCRAR hearings and present testimony on proposed rules that he or
she determines will have an economic impact on specific businesses, business
sectors, public utility ratepayers, local governmental units, regulated individuals
and entities, or the state's economy as a whole.
Approval of germane modifications to proposed rules
Current law permits an agency to make a germane modification to a proposed
rule at certain points during the legislative review process. Under the bill, if an
agency makes a germane modification to a proposed rule at any time during the
legislative review process, the agency must also submit that modification to the
governor for approval. The governor, in his or her discretion, may approve or reject
the modification. If the governor does not approve the modification, the agency may
not promulgate the proposed rule, except that the agency may resubmit the proposed
rule to the legislature without the modification.
Statements of policy and interpretations
Under current law, if JCRAR determines that a statement of policy or an
interpretation of a statute meets the definition of a rule, it may direct the agency to
promulgate the statement or interpretation as an emergency rule within 30 days
after JCRAR's action.
Under the bill:
1. The OBD has the same power as JCRAR to direct an agency to promulgate
a statement of policy or interpretation of a statute as an emergency rule.
2. JCRAR or the OBD must, if requiring the agency to promulgate the
statement or interpretation as an emergency rule, also require the agency to
promulgate the statement or interpretation as a permanent rule, using the
permanent rule-making procedure.

3. JCRAR or the OBD may, in addition to, or instead of, requiring the agency
to promulgate the statement or interpretation as a permanent or emergency rule,
prohibit the agency from implementing or enforcing the statement of policy or
interpretation until the statement or interpretation is promulgated as a rule or until
any such prohibition is rescinded.
Loading...
Loading...